For supporters of the two-year-old health reform law, Tuesday’s Supreme Court hearing was supposed to be the day that the grownups took over. After the Affordable Care Act had been demonized and misconstrued and called a threat to the very soul of America, it was going to be the moment when all that crazy rhetoric fell away, leaving only measured legal reasoning. This reasoning would surely say that the Constitution gives Congress the power to force individuals to buy health insurance, a major tenet of the health care law. Those rogue, ideological district court judges who found the law’s individual mandate an unprecedented case of federal overreach were going to eat their words.
It didn’t happen that way. The High Court appeared just as divided as the public and the lower courts whose rulings have both upheld and struck down the new health care law in the past year and a half. And when Obama’s Solicitor General Donald Verrilli stepped up to explain to the High Court that the Affordable Care Act’s individual mandate is within congressional authority to impose, he faced far more hostility and skepticism than he probably expected.
Even before the justices began to ask Verrilli to defend the arguments he had made in briefs submitted to the court in the past several months, he seemed uneasy. In his opening remarks, Verrilli stammered and appeared either nervous or unwell, stuttering, repeating himself and seeming far less confident than he had on Monday, when he appeared before the justices to argue the court has standing to decide this case in 2012. This is how he began his argument Tuesday:
The Affordable Care Act addresses a fundamental and enduring problem in our health care system and our economy. Insurance has become the predominant means of paying for health care in this country. Insurance has become the predominant means of paying for health care in this country. For most Americans, for more than 80 percent of Americans, the insurance system does provide effective access. Excuse me.
Lawyers arguing against the individual mandate on behalf of 26 suing states fielded difficult questions too, but Verrilli had the tougher day. The value of Supreme Court oral arguments is typically to get a glimpse of which way the justices are leaning, not to see which party’s lawyer does a better job explaining their arguments. The debate over case law and legal logic happens in briefs and among the justices during the months between oral arguments and when they issue their rulings. All the same, most observers felt that Verrilli’s performance on Tuesday did not inspire confidence in the government’s position.
In Verrilli’s defense, some of the key justices seemed very skeptical as soon as the proceedings began. Almost immediately, Justice Anthony Kennedy, the court’s swing vote, posed a question that matched the argument being made by the mandate’s challengers. “Can you create commerce in order to regulate it?” he asked. That the swing vote on the High Court was suggesting the individual mandate would “create commerce” at all was a bad sign for supporters of the health care law. The government’s defense of the individual mandate, after all, is that Congress has the power to regulate inter-state commerce and that the health insurance market is commerce that already exists.
Soon after Kennedy raised doubts about the government’s main defense of the law, Chief Justice John Roberts, who supporters of the law also hope might support the individual mandate, asked if the government wasn’t dangerously close to a slippery slope. Would the government’s argument that the individual mandate is within Congress’s power mean that that Congress could also require everyone to buy a cell phone—to better facilitate emergency services including 911 calls, another unpredictable market that, like health care, everyone participates in. Verrilli stumbled again as he tried to answer:
I think the fundamental difference, Mr. Chief Justice, is that that’s not an issue of market regulation. This is an issue of market regulation, and that’s how Congress — that’s how Congress looked at this problem. There is a market. Insurance is provided through a market system.
Before Verrilli could go on, Justice Samuel Alito, of the court’s conservative wing, interrupted him. “Do you think there is a market for burial services?” Alito asked. So began a line of questioning in which Alito suggested that, if the mandate is upheld, any service that every person will eventually need—like health care or burial—opens up a new opportunity for the federal government to require people to buy insurance or pay for that service up front.
Next, Kennedy questioned Verrilli again, suggesting that because the health care law may be “unprecedented,” “changing the relationship of the individual to the government,” the government has “a heavy burden of justification to show authorization under the Constitution.” In other words, Kennedy said the bar the government must clear for the individual mandate to stand is particularly high given that it would be the first case in history of the federal government requiring individuals to purchase a product.
As Verrilli responded to a question from Justice Antonin Scalia about whether the government forcing people to have health insurance is akin to forcing them to eat broccoli—a comparison made by a lower court judge last year—Justice Ruth Bader Ginsburg interjected, seemingly in an attempt to rescue Verrilli and steer back to his argument that the health care market is unique and in need of regulation because of its unpredictability.(During Tuesday’s proceedings, the requirement to purchase health insurance was compared to mandating broccoli consumption, exercise, inoculation against deadly disease, and the purchase of electric cars.) Soon afterward, another left-leaning justice, Sonia Sotomayor, seemed also to try to help Verrilli focus, laying out for her colleagues the main points in the government’s case.
Throughout most of the proceedings, arguments toggled between the critics’ contention that the individual mandate is an unprecedented government power grab to force people to buy something, and the notion that the mandate is simply an attempt to regulate a health care market that already exists but functions poorly. Yet the justices veered elsewhere. Verrilli argued that the individual mandate’s primary role is to end the cost shifting that occurs when uninsured people show up to hospital emergency rooms and get medical care they don’t pay for, which is then passed along to taxpayers and those with insurance. But Justice Samuel Alito pointed out that the mandate could also be explained as a means to force young healthy Americans, many of whom currently stay out of the health insurance market, to subsidize insurance for sicker, older Americans. When the conversation moved to the question of whether the financial penalty for not complying with the individual mandate is a tax, which could automatically make it constitutional, Scalia pointed out that President Obama had pointedly avoided the word tax, which led to this exchange:
JUSTICE SCALIA: Is it a tax or not a tax? The President didn’t think it was.
GENERAL VERRILLI: The President said it wasn’t a tax increase because it ought to be understood as an incentive to get people to have insurance.
So it’s a tax, but not a tax increase, Verrilli seemed to say. The following exchange took place later:
CHIEF JUSTICE ROBERTS: Why didn’t Congress call it a tax, then?
GENERAL VERRILLI: Well
CHIEF JUSTICE ROBERTS: You’re telling me they thought of it as a tax, they defended it on the tax power. Why didn’t they say it was a tax?
GENERAL VERRILLI: They might have thought, Your Honor, that calling it a penalty as they did would make it more effective in accomplishing its objectives. But it is in the Internal Revenue Code, it is collected by the IRS on April 15th. I don’t think this is a situation in which you can say—
CHIEF JUSTICE ROBERTS: Well, that’s the reason. They thought it might be more effective if they called it a penalty.
Roberts’ sarcasm was evident. He may end up casting a critical fifth vote against the individual mandate, assuming the court’s three other conservative justices—Scalia, Alito and Clarence Thomas—vote to strike the mandate and are joined by Kennedy. How Kennedy and Roberts will vote is still an open question. Although both seemed highly skeptical of the government’s case on Tuesday, there were signs that their minds were not completely made up. For instance, near the end of the two-hour hearing, Kennedy seemed to support the government’s contention that the health insurance market is a unique and cohesive system that the mandate would be a part of and therefore could be open to federal regulation:
I think it is true that if most questions in life are matters of degree, in the insurance and health care world, both markets — stipulate two markets — the young person who is uninsured is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that is not true in other industries.
And early in the day, Roberts supported a main piece of the government’s argument—that no one is outside the health care market, as the challengers to the law contend. Said the chief justice:
You don’t know if you’re going to need a heart transplant or if you ever will. So, there’s a market there. In some extent, we all participate in it.
On Wednesday, Paul Clement, the lawyer who on Tuesday argued against the individual mandate on behalf of the 26 suing states, will get another chance to persuade the justices. This time, he’ll argue that the entire Affordable Care Act must fall if the individual mandate is struck down. Deputy Solicitor General Edwin Kneedler will argue that the entire law, except for two key insurance regulations, should remain even if the mandate goes. A court-appointed lawyer will say that the mandate can be surgically removed from the Act. Then, in the final health care argument of the week, Clement will try to persuade the justices that the health care law’s expansion of Medicaid violated state sovereignty. Taking the opposite position on Medicaid, the last person to argue before the Supreme Court on the Affordable Care Act, before the justices render their final decision in June, will be Verrilli.